When a person retires, what happens with their AVC's?

• All benefits taken at same time - benefits from AVC's will be quoted along with main scheme benefits
• Before April 2006, those who started paying AVC's after April 1987 could only take them in pension form.
  • This has been changed by A-Day
  • Non-compulsory, so trustees may not allow it
• Member must be given option of purchasing lifetime allowance otherwise unauthorised.
• May be able to take up to 25% may be taken

• Benefits quoted at early stage - esimated pay
• Member decided which benefit they require and puts in writing together with declaration questionnaire
• Final benefit calculations and allowance checks made and confirmed to member
• Cash lump sum not finalised until AVC's have been disinvested and final value known.
• Pension madate required
• Birth and marriage/civil partnership certificates of member and spouse/partner to be submitted.

• Quotation - 6 months prior to NRA
  • estimated earnings
  • Options
    • full scheme pension
    • cash lump sum (25%)
  • Death benefits
  • AVC's
    • cash sum or pension
    • annuity or paid from pension fund
• Member written confirmation
• Complete declaration form/questionnaire for HMRC
  • previously crystallised benefits, or intend to crystallise other benefits on or before NRA
• Final benefit calculations and allowance checks
• final figures confirmed
• Pension mandate completed - authorisation for pension to be paid
• Birth and Marriage certificates supplied
• employer provides parts 2 and 3 of P45 for tax coding
• Benefits paid
• Update Nomination form

• estimate of LTA used - on quotation
• declaration/questionnaire
• any protection status

• Within 3 months of BCE
  • statement - % of LTA used
  • Lifetime allowance charge
    • calculation
    • amount due
    • administrator paid it?
• Annual statement confirming LTA used
• anuual check for excessive pension increases
• Disclosure Regs
  • Details and conditions of payment provided within one month of commencement of payment
  • Additional disclosures for AVC's 6 months before date of retirement

• At least 2 months prior to NRA confirm member is not retiring
• After age 75 - secured pension or alternatively secured pension
• Quotation and HMRC checks similar for normal retirement
  • benefits increased
  • extra pension accrual

• NICO send GMP statemet to employee and scheme
  • weekly amount payable
  • appropriate revaluation
• pension paid by scheme must be no less than that notified by NICO
• May be commuted on grounds of triviality
• If postponed
  • 7 complete weeks of postponement = 1/7% increase for each week
  • when it eventually comes into payment, scheme notified NICO of increases
• RST = no individual checks needed
• PR basis = must compare benefits that could be purchased with those provided by the scheme